AIG to buy reinsurer Validus Holdings for $5.56B in cash

Jan 22 (Reuters) - American International Group (NYSE:AIG) on Monday said it would buy property and casualty reinsurer Validus Holdings (NYSE:VR) for $5.56 billion in cash to strengthen its general insurance business.

AIG's offer of $68 per share represents a 45.5 percent premium to Validus' Friday close.

Validus' shares were up nearly 16 percent at $54 before the bell.

The deal, part of Chief Executive Brian Duperreault's turnaround plan, is expected to immediately add to AIG's earnings per share and return on equity.

More from FOX Business

MARKET SNAPSHOT: Dow Futures Retreat As Government Shutdown Stretches Into 3rd Day

Investors shouldn’t fret a government shutdown

Wall Street week ahead: Where Netflix goes, Big Tech may follow

The deal, expected to close in mid-2018, will also boost AIG's talent and underwriting business apart from general insurance, the company said.

Citigroup Global Markets Inc, Perella Weinberg Partners LP and Debevoise & Plimpton LLP advised AIG on the transaction, while Validus was advised by J.P. Morgan Securities LLC and Skadden, Arps, Slate, Meagher & Flom LLP. (Reporting by Nikhil Subba in Bengaluru; Editing by Supriya Kurane)